Correlation Between Iex Group and ArcelorMittal

Can any of the company-specific risk be diversified away by investing in both Iex Group and ArcelorMittal at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Iex Group and ArcelorMittal into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Iex Group NV and ArcelorMittal SA, you can compare the effects of market volatilities on Iex Group and ArcelorMittal and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Iex Group with a short position of ArcelorMittal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Iex Group and ArcelorMittal.

Diversification Opportunities for Iex Group and ArcelorMittal

0.12

Correlation Coefficient

Iex Group  ArcelorMittal

Average diversification

The 3 months correlation between Iex and ArcelorMittal is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Iex Group NV and ArcelorMittal SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ArcelorMittal SA and Iex Group is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Iex Group NV are associated (or correlated) with ArcelorMittal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ArcelorMittal SA has no effect on the direction of Iex Group i.e., Iex Group and ArcelorMittal go up and down completely randomly.

Pair Corralation between Iex Group and ArcelorMittal

Assuming the 90 days trading horizon Iex Group NV is expected to generate 1.14 times more return on investment than ArcelorMittal. However, Iex Group is 1.14 times more volatile than ArcelorMittal SA. It trades about 0.14 of its potential returns per unit of risk. ArcelorMittal SA is currently generating about 0.14 per unit of risk. If you would invest  188.00  in Iex Group NV on April 21, 2025 and sell it today you would earn a total of  22.00  from holding Iex Group NV or generate 11.7% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	62.5%
Values	Daily Returns

Iex Group NV  vs.  ArcelorMittal SA

Iex Group NV

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Iex Group NV are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Iex Group unveiled solid returns over the last few months and may actually be approaching a breakup point.

ArcelorMittal SA

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ArcelorMittal SA are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, ArcelorMittal unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Iex Group and ArcelorMittal

The main advantage of trading using opposite Iex Group and ArcelorMittal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Iex Group position performs unexpectedly, ArcelorMittal can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in ArcelorMittal will offset losses from the drop in ArcelorMittal's long position.

The idea behind Iex Group NV and ArcelorMittal SA pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.